Victory Capital (VCTR) Q4 2024 earnings summary

Executive summary

• Total client assets reached $176.1 billion at year-end 2024, with record fourth-quarter and full-year adjusted earnings per share, adjusted EBITDA, and adjusted EBITDA margin achieved.

• The acquisition of Amundi US is expected to close by the end of Q1 2025, targeting $100 million in annual cost synergies and expanding global reach.

• Long-term net flows improved in Q4 2024, driven by strong sales in the ETF platform and continued momentum in high-margin, rules-based, and active ETFs, though Q4 net flows were negative at -$1.7 billion.

• Investment performance remained strong, with 66% of mutual fund and ETF AUM rated four or five stars by Morningstar and 59%-79% of AUM outperforming benchmarks over 3-10 years.

• Board authorized a 7% increase in quarterly dividend to $0.47 and a new $200 million share repurchase plan.

Financial highlights

• Q4 2024 revenue reached a record $232.4 million, up 12.9% year-over-year; full-year revenue was $893.5 million, up 8.8%.

• Q4 GAAP operating income was $111.7 million (48.1% margin), up 29% year-over-year.

• Q4 GAAP EPS was $1.17; full-year GAAP EPS was $4.38, up over 40% from 2023.

• Adjusted net income with tax benefit for Q4 was $95.1 million ($1.45 per diluted share), up 23.5% year-over-year; full-year adjusted net income with tax benefit was $353.1 million ($5.36 per diluted share), up 14.7%.

• Adjusted EBITDA for Q4 was $126 million (54% margin), and full-year adjusted EBITDA was $476 million, up 14%.

Outlook and guidance

• Amundi US acquisition is on track to close by end of Q1 2025, with $100 million in annual cost synergies targeted by end of year two, most realized in year one.

• Organic growth outlook is positive, supported by a robust pipeline and anticipated benefits from the Amundi transaction.

• Long-term operating margin guidance remains at 49%, with confidence in scalability post-Amundi integration.

• Continued focus on globalizing distribution and diversifying investment capabilities through strategic partnerships.